Mealey's Insurance Fraud : Mealey's : Legal News & Analysis

Mealey's Insurance Fraud

January 10, 2023
11th Circuit Finds No Error In Allowing Expert Testimony In Insurance Fraud Case

ATLANTA — A district court did not err in admitting expert opinion testimony against a man convicted for his role in a $37 million health care fraud scheme that began in 1998 and involved bribing physicians to have patients entered into a network of assisted living facilities and skilled nursing facilities that he owned, the 11th Circuit U.S. Court of Appeals ruled, rejecting each of the man’s other arguments for reversal.
January 06, 2023
Federal Judge Grants Judgment For Insurers In Fraud Suits, Cites False Statements

CAMDEN, N.J. — A New Jersey federal judge granted summary judgment to commercial general liability insurers in consolidated declaratory judgment suits against their insureds seeking a declaration stating that they have no duty to defend the insureds in an underlying state court suit filed by people injured in a shooting, finding that because the insureds made omissions on their insurance application, the insurers are entitled to rescind the policies due to “equitable fraud.”
January 06, 2023
Summary Judgment Denied In Suit Over Policy Rescission For Misrepresentations

HOT SPRINGS, Ark. — On remand from the Eighth Circuit U.S. Court of Appeals, a federal judge in Arkansas denied multiple summary judgment motions in a suit over the rescission of an insurance policy, finding that “there may be a genuine dispute of material fact” about whether an insurer, through its agent, knew about information omitted from an insured’s application and whether the insurer would have declined to issue the policy if all those facts had been known.
January 04, 2023
10th Circuit Majority Partly Reverses Ruling Against Professional Liability Insurer

DENVER — A majority of the 10th Circuit U.S. Court of Appeals affirmed a lower federal court’s ruling that an insurer’s rescission of a professional liability insurance policy was untimely but found that the lower courted erred in making an Erie prediction that the New Mexico Supreme Court would not enforce the policy’s unambiguous exclusion for claims “arising out of any conversion, misappropriation, commingling [of] or defalcation of funds or property.”
January 03, 2023
Psychologist, Professor Urge High Court To Construe Identity Theft Law Narrowly

WASHINGTON, D.C. — Four days after a psychologist filed his petitioner merits brief in the U.S. Supreme Court championing a narrow construction of the federal aggravated identity theft statute under which he was convicted, a law professor filed an amicus curiae brief supporting the petitioner, encouraging the high court to avoid the vagueness that he says the Fifth Circuit U.S. Court of Appeals employed in its affirmance of the petitioner’s conviction.
December 22, 2022
Magistrate Rules On Dismissal Motion In Coverage Row Over Yacht Damaged By Reef

FORT LAUDERDALE, Fla. — A Florida federal magistrate judge issued a report recommending granting in part an insured’s dismissal motion in an insurer’s declaratory judgment suit to void a policy issued to a yachting company, finding that a breach of general condition claim should be dismissed because the policy’s requirements to complete the insurer’s recommendations do not apply when the insurer failed to request a survey.
December 22, 2022
Judge Denies Judgment For Insurer, Cites Failure To Disclose $11.5M Rescission

TAMPA, Fla. — A Florida federal judge denied a property insurer’s summary judgment motion but granted Certain Underwriters at Lloyd’s, London’s final summary judgment motion in a dispute over Lloyd’s duty to defend the insurer in underlying lawsuits, finding that the policy Lloyd’s issued to the insurer “is due to be rescinded” because the insurer failed to disclose its investors’ threats to rescind their $11.5 million investment.
December 22, 2022
Judge Grants $310,000 Default Judgment Against Clinic For Defrauding GEICO

MIAMI — Finding “no clear error” and agreeing “with the reasoning and recommendations,” a federal judge in Florida affirmed and adopted a magistrate judge’s report and recommendation and granted four insurers’ motion for default judgment against three defendants who failed to appear in a suit alleging that they schemed to defraud the insurers of $2.1 million by filing illusory or medically unnecessary claims for insureds who had recently been involved in automobile accidents.
December 20, 2022
Parties Stipulate To Dismissal Of Suit Over Rescission Of Homeowners Policy

LANSING, Mich. — After a homeowner was granted permission to file a motion for summary judgment after deadline in his suit seeking insurance benefits for a fire at his Michigan home, he and his homeowners insurer notified the federal court that they had agreed to settle the matter; on Dec. 19, they filed a stipulation of dismissal with prejudice.
December 20, 2022
3rd Circuit Affirms Dismissal Of Insurers’ RICO Suit Against Suboxone Makers

PHILADELPHIA — The Third Circuit U.S. Court of Appeals affirmed dismissal of two consolidated cases in health insurers’ Racketeer Influenced and Corrupt Organizations Act (RICO) violations suits against companies selling and manufacturing Suboxone asserting that the companies fraudulently conspired for Suboxone’s inclusion in the insurers’ formularies, finding that the insurers failed to comply with the “particularity” requirements of Federal Rule of Civil Procedure 9(b).
December 19, 2022
Settlement Agreement Sealed By Federal Judge In Insurance Coverage, Fraud Dispute

TOLEDO, Ohio — An Ohio federal judge granted a mortgagee’s motion to seal a confidential settlement agreement in a breach of contract suit it filed against insurers and a company that previously owned resort property purportedly damaged by water and wind.
December 16, 2022
Counterclaim Dismissal Denied In Row Over ‘Fraudulent’ Excess Insurance Claims

MOCKSVILLE, N.C. — A North Carolina state court judge denied a chicken processing plant owner’s motion to dismiss excess insurers’ recoupment and unjust enrichment counterclaims in a breach of contract, bad faith and deceptive trade practices suit against excess coverage insurers after a fire at the plant, finding that the counterclaims regarding the plant owner’s “fraudulently asserted entitlement to insurance proceeds” to fund improvements outside of fire damage “satisfy the element of falsity.”
December 16, 2022
Magistrate Recommends Awarding Insurer Judgment, Finding Policy Void From Inception

BROOKLYN, N.Y. — Finding that a commercial insurer has established that a company made misrepresentations in its application for a businessowners policy and that, pursuant to its underwriting guidelines, the insurer would not have issued the policy if the company had provided truthful responses, a federal magistrate judge in New York recommended that the court enter a declaratory judgment that the policy is void from its inception and that the insurer is not obligated to pay any claims the company submits.
December 15, 2022
Fla. Magistrate Rules On Motion In Limine In $3.8M No-Fault Insurance Fraud Suit

MIAMI — A Miami federal magistrate judge granted in part a motion in limine filed by a physician, a health care facility and a purported health care facility owner seeking to exclude evidence related to the physician and owner’s arrests and certain testimony in a fraud and Racketeer Influenced and Corrupt Organizations (RICO) Act violation suit filed against them by GEICO, finding that GEICO is not allowed to introduce evidence about the arrests because its “relevance argument . . . is wholly unconvincing” (Government Employees Insurance Co., et al. v. Gilberto Seco, M.D., et al., No. 21-24155, S.D. Fla., 2022 U.S. Dist. LEXIS 223576).
December 12, 2022
Federal Judge Dismisses Claims In Row Over Alleged ‘No Value’ Insurance Policies

TRENTON, N.J. — A New Jersey federal judge on Dec. 9 granted a successor insurer’s motion to dismiss counterclaims in its declaratory judgment suit seeking a declaration that life insurance policies it issued that are now owned by an insolvent insurer are void ab initio, finding that the insolvent insurer’s counterclaims for fraud, negligent misrepresentation, violations of the Texas Deceptive Trade Practice Act (DTPA) and promissory estoppel were insufficiently alleged.
December 12, 2022
Parties In Crop Insurance Case Dispute Bid For Acquittal Or New Trial

PIERRE, S.D. — Two farmers that a South Dakota federal jury found guilty of making false statements regarding crop insurance are seeking a judgment of acquittal or a new trial, while the government contends that neither is warranted.
December 12, 2022
Magistrate Allows Testimony From Expert In Support Of Insurance Fraud Charges

MIAMI — An expert retained by an insurer that sued a group of medical facilities and their employees for submitting fraudulent claims may testify, a federal magistrate judge in Florida said, finding the arguments for exclusion best addressed through cross-examination.
December 07, 2022
Judge Finds Insured Misrepresented Cause Of Car Damage; Insurer Awarded Summary Judgment

SEATTLE — Finding that the “evidence is overwhelming that Plaintiff deliberately misrepresented the circumstances surrounding the damage to his car,” a federal judge in Washington granted summary judgment to an insurer and dismissed the insured’s breach of contract and bad faith suit.
December 07, 2022
Relator’s Federal, Virginia Fraudulent COVID Testing, Care Claims Survive Dismissal

NEWARK, N.J. — A relator has successfully pleaded claims that the owner and operator of numerous urgent care clinics coded patients’ visits for COVID-19 testing to be reimbursed at higher rates and billed for medically unnecessary office visits to survive a motion to dismiss under the False Claims Act (FCA) and Virginia Fraud Against Taxpayers Act (VFATA), a federal judge in New Jersey found.
December 07, 2022
Judge: Insured’s Material Misrepresentation On Auto Policy Bars Accident Coverage

ORANGE COUNTY, Calif. — A California judge granted an automobile liability insurer’s motion for summary judgment in its declaratory judgment lawsuit disputing coverage for an accident, concluding that the insured made a material misrepresentation as to the use of his vehicles on the insurance application.
December 07, 2022
11th Circuit Rules On Remaining Issues On Appeal In Hurricane Irma Fraud Suit

ATLANTA — Ruling on three remaining issues on appeal in a coverage dispute stemming from a hotel operator insured’s alleged filing of a fraudulent Hurricane Irma commercial property damage claim, the 11th Circuit U.S. Court of Appeals held Dec. 6 that even assuming that the lower federal court erred in admitting the transcripts of the insured’s sole member’s examinations under oath, any error was harmless.
December 07, 2022
U.S. High Court Hears Arguments In Appeal Over U.S. Dismissal Of Qui Tam Suit

WASHINGTON, D.C. — The United States lacks authority to dismiss a False Claims Act (FCA) case after declining to intervene, the attorney representing a relator in a case over Medicare billing argued Dec. 6 during oral arguments before the U.S. Supreme Court.
December 06, 2022
West Virginia High Court Reverses Judgment For Insurer In Policy Rescission Row

CHARLESTON, W.Va. — The West Virginia Supreme Court of Appeals reversed a lower court’s decision granting summary judgment to Allstate in a breach of contract and unfair practices suit filed against it by an insured homeowner after Allstate rescinded his homeowners policy for alleged misrepresentations on the policy application, finding that issues of fact remain regarding whether a policy question related to occupying the house within 30 days “was material to Allstate’s issuance of the policy.”
December 06, 2022
Insurers’ Claims Of Fraudulent Billing For COVID Tests Survive Dismissal Motion

NEWARK, N.J. — Health insurers adequately allege their claims of insurance fraud, common-law fraud and negligent misrepresentation to survive a motion to dismiss under Federal Rule of Civil Procedure 9(b) by asserting that two radiology laboratories and other entities connected with several doctors participated in “a series of fraudulent schemes” to fraudulently bill for COVID-19 testing, a federal judge in New Jersey found.
December 06, 2022
Life Insurer To 7th Circuit: Rescission For Misrepresentation Should Be Affirmed

CHICAGO — A trial court did not err in finding that an insured was obligated to notify his insurer of his cancer diagnosis between the time he applied for the policy and its inception and that the diagnosis was material to the insurer’s risk, entitling it to rescind the policy, the insurer told the Seventh Circuit U.S. Court of Appeals in urging it to affirm the lower court’s summary judgment ruling (Lorrie R. Meier v. Pacific Life Insurance Company, No. 22-1607, 7th Cir.).